Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Investors like what they’re seeing from the stock market so far in January, and the good times continued on Monday. The Nasdaq Composite (^IXIC) led indexes higher, and the S&P 500 (^GSPC 1.19%) climbed back over the 4,000 mark even as it and the Dow Jones Industrial Average (^DJI) also put up healthy gains.
Index
Daily Percentage Change
Daily Point Change
Dow
+0.76%
+254
S&P 500
+1.19%
+47
Nasdaq
+2.01%
+224
Data source: Yahoo! Finance.
Among the big winners on Monday, Wayfair (W 26.80%) impressed shareholders with a second straight day of huge share-price gains, this time prompted by optimistic views of the online furniture specialist. Meanwhile, Silvergate Capital (SI 16.75%) mounted a comeback of its own, and shareholders are seeing some favorable trends in the cryptocurrency market that could signal a big recovery for the bank. Find out more about both of these stocks below.
Wayfair was up 20% on Friday, and it added another 27% on Monday. After making some tough choices, the online furniture pioneer got words of encouragement from stock analysts on Wall Street.
Friday’s gains came as Wayfair said it would lay off about 1,750 employees as part of its broad cost-cutting efforts. Investors were generally pleased with the prospect of Wayfair cutting expenses by as much as $1.4 billion annually because sentiment has been favorable for companies that have been able to pivot toward prioritizing near-term profits.
On Monday, stock analysts got around to assessing the move and were generally pleased. BofA analysts gave Wayfair a rare double upgrade, moving their rating on the stock all the way from underperform to buy and more than doubling their price target on the stock from $30 per share to $65. BofA believes that Wayfair should be able to post positive adjusted pre-tax operating earnings in 2023, and it anticipates further share-price gains are possible even after the big jump. Analysts at JPMorgan (JPM 1.62%) also gave a double upgrade from underweight to overweight, and Wedbush raised its rating to outperform as well.
It’s uncommon for a stock to see huge gains twice in a row. At this point, those watching Wayfair have high hopes for the company to make good on its promises for cost reductions and near-term profitability. It’ll now be up to Wayfair to handle those higher expectations.
Silvergate Capital shares were up 17% on Monday. The crypto-focused banking institution gave investors some good news on what could have been a tough situation, and improving market conditions in cryptocurrency also helped boost sentiment.
Late Friday, Silvergate issued a statement showing that it had extremely limited exposure to the recent bankruptcy filing of crypto lending specialist Genesis. Genesis had less than $2.5 million in deposits at the end of 2022 and as of last Thursday. Moreover, Genesis isn’t a custodian under Silvergate’s SEN Leverage loan program, and Silvergate has no outstanding loans to Genesis or investments in the crypto lender.
Silvergate likely also benefited from rising crypto prices. After a terrible year in 2022, several digital assets have mounted impressive comebacks, including some of the largest cryptocurrencies in the world. That, in turn, bolstered confidence that the crypto-related companies that keep money on deposit with Silvergate would be able to sustain and grow their banking relationships, hopefully prompting a turnaround.
Silvergate is still reeling from a huge drop in deposits recently. But if it can weather the storm long enough for the crypto universe to recover, investors might find today’s share prices for Silvergate too good to resist.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Dan Caplinger has positions in JPMorgan Chase. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Silvergate Capital and Wayfair. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.
Market data powered by Xignite.
